Newstart, family tax benefits and the disability support pension – all targeted in the budget – are growing far more slowly than other government spending, a new analysis finds.

Prepared by the Australian Council of Social Service from estimates used by the Commission of Audit, the analysis finds total government spending on track to grow 3.7 per cent a year above the rate of inflation for the next decade.

"Income support for the unemployed and low income families are not the primary drivers of budget expenditure growth": ACOSS chief executive Cassandra Goldie. Photo: Tomasz Machnik

But spending on the disability support pension is projected to grow only 2.8 per cent, spending on unemployment benefits only 1.1 per cent, while spending on family tax benefits is expected to slide in real terms even before any budget cutbacks.

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Even the age pension is only expected to increase in cost by 4.7 per cent a year above the rate of inflation.

The really big drivers of government spending are childcare and paid parental leave, whose costs are set to soar 14 per cent a year above the rate of inflation; hospitals, whose costs are set to soar 11.7 per cent; and carers payments whose costs are set to soar 10.2 per cent a year.

ACOSS chief executive Cassandra Goldie said if the government was serious about containing costs it should be talking about containing the costs which were growing the fastest rather than those growing the slowest.

“This is evidence that, despite the current media focus, income support for those who are unemployed, people with disabilities and low-income families are not the primary drivers of budget expenditure growth,” she said. “We'll be looking today to see if the budget targets areas of major spending growth in which assistance is poorly targeted and unsustainable.”

Newstart, family tax benefits and the disability support pension between them account for less than 3 per cent of the expected expenditure growth in the next 10 years. Hospitals, the National Disability Insurance Scheme, schools, childcare and parental leave and age pensions between them account for 50 per cent.

Measures likely to be included in the budget include denying the Newstart unemployment benefit to people aged under 25, requiring people under 30 to work for the dole, restricting family benefits to families earning less than $150,000 and regular tests to reprove eligibility for the disability support pension.

The budget is also expected to gradually lift the pension age to 70, and to lift the pension by a less generous formula after the election.

It will aim to return the budget to a surplus of 1 per cent of gross domestic product by 2024.

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